Financial institutions, such as banks and the like, offer account reconciliation services to various clients, such as small business clients, corporate clients, large commercial clients and the like. Account reconciliation benefits the client by having the financial institution reconcile accounts, or otherwise make certain that accounts are in balance. Thus, eliminating the need for the client to dedicate resources to accommodate this time-consuming task.
As part of the overall account reconciliation service or as a separate offering, many financial institutions also offer clients a fraud prevention service; commonly referred to by those skilled in the financial services area as a positive pay service. Most clients will issue paper-based checks in the course of their business. Positive pay service provides a means for identifying mismatches between what the client identifies as should be on the check and what actually shows up on the check during payment processing, and then allows the client to make a decision on whether to authorize payment on the check or to issue a return decision (i.e., payment denied).
According to many such positive pay services, a client will send the financial institution an issue file that lists all of the checks that are going to issue within an upcoming time frame, for example, the next day, week, month, etc. The issue file includes information found on the check, such as account number, serial number, amount or the like. Once the financial institution receives the check for payment, the financial institution matches up the information on the check versus the information provided in the issue file. As long as the information matches, the check is authorized for payment. However, in the event that the check does not match the information in the issue file, the client is given the opportunity to make a decision, referred to as a positive pay decision, as to whether to proceed with payment or whether to return the check as payment denied.
Typically, the financial institution implements a client access program to provide the client with the opportunity to make decisions on items that the financial institution has identified as potentially fraudulent (i.e., items in which the received check does not match the information in the client supplied issue file). The client must make a pay or return decision on all items identified by the financial institution within a specified time period in order for the financial institution to meet their right of return window. In most instances the right of return window is 24 hours in which the financial institution must return/deny payment and, if a return is not made within the return window, payment occurs. As such, if the client does not disposition an identified item within the specified time period, a default decision is applied to the item. While the client is typically afforded the option of making their default decision a pay decision or a return decision, in most instances, to insure against improperly authorizing payment, the default decision will be a return decision.
In practice, the client's specified time/deadline for making payment/return decisions is typically within a few hours of the financial institution's right of return window. Thus, if the client fails to make decisions on numerous identified items within their allotted time, causing the identified items to be classified as a default decision, and the client's default decision is a return decision, the financial institution must process the return within a short period of time to insure that the right of return window is still open. This same scenario presents itself if the client positively identifies numerous identified items as return decision and the decisions are made at or near the clients' allotted time for making such decisions.
Currently, once return decisions are received from the client (or default decisions that are associated with returns) the processing that proceeds is entirely manual and, therefore, unduly labor intensive. First, a financial institution representative monitors the receipt of decision reports from the client and from these reports identify those items having a return decision status. In practice, once these items have been identified the financial institution representative is required to manually enter account number and serial number in a service management system and create a credit adjustment in the service management system, which a supervisor then reviews. In addition, the representative must pull an image of the check being denied payment, write a return check ticket and communicate with the returns department, which further processes the return. In many instances, the manual nature of the return process creates a time-crunch problem for the financial institution because all of these manual processes must be completed prior to the expiration of the right of return window. This problem is exasperated if the client's return decisions or default decisions occur proximate the right of return window.
It should also be noted that in many instances financial institutions are able to charge a premium for their positive pay service because they insure against payment of fraudulent actions. In this regard, the financial institution becomes liable for mismatched information that the financial institution failed to identify as potentially fraudulent, items identified as potentially fraudulent but not communicated to the client for a decision process, potentially fraudulent items identified by the client as a return decision that the bank does not return and/or potentially fraudulent items identified by the client as a return decision that the bank does not meet the right of return window. Thus, if the financial institution is unable to process a client's request for return within the allotted right of return window, the financial institution may, based on service configuration, be liable for the payment amount. Additionally, the manual nature of the current process provides for many opportunities for human-error type defects due to incorrect entry of data and the like.
In addition, current methods are not readily conducive to providing an audit trail back to the external user/client representative that authorized the return decision. This type of audit trial information is not only invaluable to the accounts reconciliation processing operations, but is also valuable to the client services functions to research client's inquires and the like. From the reconciliation processing aspect, the audit trail provides a means to substantiate the clients' positive pay actions when authorizing return or payment of a potentially fraudulent item.
Therefore, a need exists to develop systems, method, computer program products and the like for automating the processing of financial institution client positive pay return decisions. The desired systems, methods and computer program products should alleviate problems related to manually processing client decisions within a short period of time in order to meet the right of return window. In addition, the desired systems, methods and computer program products should eliminate problems related to manual observation of return decisions and entry of data related to return decisions or associated default decisions, which may lead to returns being overlooked or improperly processed so as to result in payment. In addition, to defect-reduction, the desired systems, methods and computer program products should provide for efficiency and cost-savings by reducing the manual involvement required to process the positive pay return decisions. Additionally, the desired systems, methods and computer program products should provide for an enhanced audit trail that traces the positive pay decision back to the external user/client that made the return decision.